Aon PLC

Good morning, and thank you for holding. Welcome to Aon PLC's second quarter 2026 conference call. At this time, all parties will be in a listen-only mode until the question and answer portion of today's call. I would also like to remind all parties that this call is being recorded. If anyone has an objection, you may disconnect your line at any time. It is important to note that some of the comments in today's call may constitute certain statements that are forward-looking in nature. as defined by the Private Securities Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results for those anticipated. For information concerning these risk factors, please refer to our earnings release for this quarter and to our most recently quarterly or annual SEC filings, all of which are available on our website. Now, it is my pleasure to turn the call over to Greg Case, President and CEO of Aon PLC.

Thanks Dylan and good morning everyone. Thank you for joining our second quarter earnings call. I'm here today with Edmund Reese our CFO and as always the financial presentation which Edmund will reference is available on our website. Consistent execution, the strength of our Aon United strategy accelerated through the three by three plan and the resilience of our business model produced second quarter and first half results in line with objectives. In addition, our investments in talent, technology, and innovative capital solutions continue to strengthen the value we deliver, expand our addressable market, and drive sustainable growth. As we enter the second half of 2026, we're well positioned to deliver on our strategic and financial commitments and continue generating long-term shareholder value. My remarks today focus on three areas. Our client demand continues to grow as organizations navigate increasingly interconnected risk and workforce challenges. Second, our organizational structure, which brings together risk capital and human capital and is supported by AI Business Services and our substantial investments, drive our ability to meet client demand and differentiate AION in the marketplace. And third, How our investments are translating into strong client impact, durable growth, and confidence in our ability to deliver through the cycle performance. Let's start with the external landscape. The environment facing our clients continues to evolve rapidly. Geopolitical uncertainty remains elevated. Economic growth remains uneven. Cyber threats continue to increase in frequency and sophistication. Climate-related risks continue to challenge traditional underwriting and capital allocation models. At the same time, organizations are adapting to profound workforce changes. The common thread across these developments is increasing complexity. As complexity rises, decision-making becomes more difficult and the cost of being wrong is more consequential. Clients are seeking greater clarity around risk exposure, capital allocation, and workforce strategy. They need integrated solutions and trusted partners who can help them navigate uncertainty rather than simply react to it. This is creating growing demand for the capabilities that distinguish Aon in the marketplace. Our expansion of Aon Claims Copilot during the quarter is one example. Building on our successful launch in November, our expansion across North America, Asia Pacific, and EMEA brings a substantial portion of our global claims management information onto a single technology platform. Claims Copilot, recently recognized by business insurance as the innovation of the year, enables delivery of a globally consistent claims experience for clients while strengthening our ability to generate insights that inform placement, negotiation, and broader risk strategies. This expansion underscores our continued investment in AI-enabled technology and innovation to help clients navigate the current environment. Importantly, claims co-pilot enhances our strong track record of claims performance. Over the past decade, we've helped clients recover more than $10 billion in financial value from overturned declinations through our advocacy. By combining that expertise with claims co-pilot, we're helping clients achieve better outcomes. The same dynamics that increase demand for our capabilities are also driving demand both within the segments where Aon is historically strong and in areas where we see opportunities to expand our addressable market. Our enterprise, large and middle market clients have complex needs. They're seeking insight, advice, and execution, not just transactions. And their decisions depend on combining data, analytics, expertise, and judgment. Organizations are increasingly seeking access to new sources of capital to fund growth and managing volatility. Bayon is creating opportunities to engage with private equity firms and other capital providers, helping clients access the risk-bearing capacity necessary to support their strategic objectives. The opportunities we see today are the result of deliberate decisions we've made over the years. Aon United remains at the center of our strategy and underpins our competitive advantage. The concept is simple, yet powerful. By bringing together expertise across risk capital and human capital, we create more value for clients, expand access to capital, and drive growth. Aon Business Services is foundational to this strategy. and over the last several years, we've accelerated investment to improve our ability to diagnose risk, access capital, and deliver better outcomes for clients. Our advantage has never been rooted in technology alone. It always comes from combining deep expertise, trusted relationships, and proprietary insights to help clients navigate important decisions. And that is particularly evident in areas where we've developed substantial proprietary data and expertise. Within talent solutions, for example, for helping clients understand how AI will reshape workforce strategies. Our ongoing investments and capabilities such as the Radford-McLagan compensation database and our proprietary AI sensitivity tool are enhancing insight we bring to clients as they assess the impact of AI on their organizations and make informed talent decisions. And as clients reskill and redeploy talent, we're helping them strengthen the employee experience. For example, through AonActivate, are data led AI powered total rewards and benefits platform. Organizations can deliver a more connected, personalized experience across benefits, well-being, pensions and rewards. These capabilities are helping clients address both sides of the workforce transformation, enabling employees to adapt to the changing nature of work while enhancing the experience that supports them. Across the firm, we see growing evidence that our technology investments are enabling our strategy and enhancing value for clients. Organizations increasingly turn to us to help them navigate some of their most important strategic decisions around digital infrastructure and data centers. A recent engagement with one of the world's largest technology companies demonstrates the value of our integrated approach. As the client accelerated its investment in large-scale digital infrastructure, traditional risk solutions were no longer sufficient. We brought together expertise across commercial risk and reinsurance to help redesign the client's risk financing strategy. expand available capacity and improve operational efficiency. Importantly, the client was looking for a strategic partner that could help reimagine the process using technology, integrate more effectively with its own sophisticated systems and create a more data-driven approach to managing risk and capital. and this is not a one-off example, but reflects a broader opportunity as companies across the tech industry are turning to Aon to help address their complex risk, resilience and capital challenges through coordinated solutions. The scale of this opportunity and the value we bring to clients is further reflected in the continued expansion of our data center lifecycle insurance program. Last week, we announced an increase in program capacity to 5 billion, while broadening the integrated risk solutions we provide to support digital infrastructure assets throughout their lifecycle. We're also seeing increasing demand from private equity and other capital providers as they seek differentiated insights and capability to deploy capital more effectively. As we deepen our relationships with these firms, we're creating and helping connect institutional funds with opportunity while creating new sources of capital for clients and providing investors with access to uncorrelated risk and return streams. In doing so, we're expanding the addressable market, strengthening resilience, and reducing Demand for our integrated capabilities is proving equally powerful in the middle market, where we continue to see increased adoption of data-driven analytics and greater collaboration across solution lines. We're expanding our middle market platform through our programmatic tuck-in strategy and have deployed more than 350 million in capital year-to-date, including opportunities that enhance our MGU and MGA capabilities. At the same time, we continue to draw on our ABS platform to accelerate NFPs growth. The success we're seeing today reinforces our confidence in continuing to invest behind these opportunities to further expand and strengthen our middle market platform over time. Taken together, these examples demonstrate how we connect risk, capital, and people solutions to drive stronger client outcomes and expand the opportunities. The continued demand for our capabilities reinforces the power of what we've created by integrating risk capital and human capital and is translating into strong financial performance and momentum. Turning briefly to our second quarter results, we delivered 5% organic revenue growth, achieving mid-single-digit or greater organic growth across all solution lines, 70 basis points of adjusted operating margin expansion, 9% adjusted EPS growth, and $493 million of free cash flow. Edmund will discuss our financial performance and capital allocation strategy in greater detail, but I'll note that our balance sheet remains strong and flexible, supporting our disciplined approach to capital allocation. Looking ahead, we're confident in the trajectory of the business. The environment will continue to evolve. Pricing conditions will change. New technologies will emerge. Capital and client needs will continue to become more complex and interconnected. However, these dynamics increase the relevance of Aon's capabilities. Organizations increasingly need insight, expertise, and execution that span risk, capital, and workforce decisions. They need partners capable of helping them operate confidently amid uncertainty. Now more than ever, we're exceptionally well-positioned to meet that need. Our organizational alignment around risk capital and union capital supported by Amazon Services further strengthens our ability to bring together distinctive capabilities on behalf of clients. As our capabilities expand and client relationships deepen, we continue to see growing opportunities to create value. And for our three by three plan, we're focused on continuing to execute with discipline and build on capabilities that support growth well beyond the plan. Finally, to our more than 60,000 colleagues around the world. Thank you. Thank you for your commitment to our clients, each other, and our AnUnited strategy. Your dedication continues to drive our success and position us for long-term growth. Now let me turn the call over to Edmund. Edmund?

Thank you, Greg, and good morning, everyone. Before turning to the details of our second quarter results, I want to frame today's discussion on the continuation of a consistent theme. through the cycle performance. Over the past several quarters, disciplined execution across our business and financial model has translated in a consistently strong performance in line with or above industry across the key financial metrics, including organic revenue growth. As we move into the second half of 2026, our underlying business and financial model, the foundation of that performance remains unchanged. What has evolved is the environment in which we are executing. We are operating in a period characterized by both the transitioning pricing cycle and an accelerated pace of technological change. Periods like this increase the dispersion across outcomes and bring in the sharper focus, the business models that are structurally advantaged and built to perform through the cycle. Against that backdrop, our results continue to reflect differentiated performance. We are delivering top line growth, expanding margins, and generating strong free cash flow. Our consistency, particularly in a changing environment, is an important signal. It reflects not just execution in a single period or given quarter, but the durability and persistence we expect from our underlying model. That durability is grounded in structural decisions we've made over time. Our client-centric organizational model, Aon United, now established over more than 15 years, aligns how we deliver solutions, invest in talent, and allocate capital. Combined with our early and continued investment in data and increasingly AI-enabled analytical capabilities, we are enhancing the quality Thank you. Our disciplined approach remains consistent We continue to make deliberate high conviction investments, many of which generate value today and build strategic advantage over time. Regardless of how the technology landscape evolves, these investments act as catalysts to strengthen our competitive advantage and support sustained growth that compounds. Areas like this can further differentiate strong businesses. and as we look at our performance in our positioning, we believe that is exactly what is occurring. In the changing environment, consistent performance is the clearest signal and that is what our results continue to demonstrate. So without framing, let's turn to our second quarter results. On slide five, you see the second quarter results. Organic revenue growth was 5% and total revenue increased 2% year over year to 4.2 billion. Adjusted operating margin expanded by 70 basis points for the quarter and reached 28.9%. Adjusted EDPS was up $3.81, up 9% year over year. And finally, we generated $483 million in free cash flow. Let's get into the details of these results, starting with organic revenue growth on slide six. Organic revenue growth was 5% in the quarter, in line with our mid-single digit for better guidance. Growth was broad-based with all four solution lines delivering 5% organic revenue growth, reflecting the strength of our diversified business mix and the consistency of the growth drivers underpinning our performance. That consistency is most evident in new business, which has contributed 9 to 11 points for nine consecutive quarters, providing a durable foundation for sustainable growth and varying market conditions. And commercial risk organic revenue growth was 5% reflecting continued strength in our core P&C business where new business generation and higher retention drove meaningful contribution from EMEA and North America. Construction delivered a fifth consecutive quarter of double digit growth as we continue to convert our record data center pipeline. Additionally, our MGA and MGU platforms benefited from ongoing client demand for specialized underwriting solutions. M&A services were lower year over year against the Q225 comparison that benefited from elevated closed deal activity. While this tempered overall commercial risk growth in the quarter, Announced transaction volumes are up over 60%, which is reflected in a stronger second half pipeline. Reinsurance delivered 5% organic revenue growth despite meaningful rate pressure in the market. Treaty growth reflected continued strong new business activity, including the addition of new logos, which more than offset 15 to 20% lower rates. While facultative placements continued to perform well globally, Growth was further supported by double digit performance in our strategy and technology group, underscoring the increasing value clients place on analytics and access to alternative capital solutions. Finally, as part of our risk capital structure, reinsurance performance reflects continued contribution from our data center development efforts. Given that we typically deliver approximately three quarters of annual treatment revenue during the first half of the year, We have strong visibility into our full year outlook. The strength of our results through six months combined with the continued momentum in international facultative placements and strong demand for our strategy and technology group solutions reinforces our confidence in delivering full year organic revenue growth consistent with our mid single digit or greater objective. Health Solutions grew 5% in the quarter, driven by continued strength in our core health and benefits business, particularly in EMEA, where demand for global benefits remained strong. Growth also benefited from improved performance in talent solutions as we converted a strong pipeline, along with contribution from NFP, particularly in executive benefits. Employers continue to face rising healthcare costs, evolving workforce needs,